UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS

International General Certificate of Secondary Education

ECONOMICS 0455/02
Paper 2 Structured Questions
May/June 2004

1 hour 30 minutes
Additional Materials: Answer Booklet/Paper

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This document consists of 3 pages and 1 blank page.

SP (CW) S61181
© UCLES 2004 [Turn over
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Answer all questions.

1 In Bangladesh there used to be a complete lack of access to health services in areas of poor
housing, and residents did not have the time or money to seek out health care. In these areas one
third of the population was affected by disease, and the child mortality rates were over ten times
the national average. Now small health centres, staffed by volunteers, are being set up in these
areas by a charity. The organisers say that these small centres have been a great success and
have proved that it is possible to provide good services in poor areas.

Other health provision is being made for one million women working in the labour-intensive
garment factories. Many workers have poor health because of long working hours and the
physically demanding nature of the work. They cannot take time off to get treatment and they
cannot afford private health care. The charity that set up the health centres went into partnership
with the factory owners by convincing them that a healthy workforce was a productive one.

(a) According to the article how do the working conditions of some workers affect their health?
[2]

(b) What is meant by ‘labour-intensive’ production? [2]

(c) How far can it be concluded from the article that people living in the areas of poor housing
have worse health than the rest of the country? [4]

(d) Sometimes the government provides services in an economy, sometimes the private sector
provides services. Explain why it is that the government provides some services. [6]

(e) The article says ‘a healthy workforce is a productive one.’

(i) Explain what this means. [3]

(ii) Should it usually be the responsibility of the employers rather than the government to
provide health care? [3]

2 In Zimbabwe a local community markets a tea which grows wild in their area. ‘Communities should
be able to manage their natural resources if they are to benefit, especially if they are to gain an
economic benefit,’ the leader of the project said.

(a) Identify the factors of production. [4]

(b) Explain what benefits might be gained by the local community in Zimbabwe from the project.
[6]

3 The UK/Dutch consumer goods company Unilever had a 35% rise in profits in the first part of
2002. The group, whose brands include tea, soap and washing powder, benefited from a rise in
profit margins, but the growth in sales was slow.

(a) Explain who might benefit from the rise in profits. [4]

(b) Discuss how firms might achieve a rise in profits. [6]

© UCLES 2004 0455/02/M/J/04

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4 (a) What is meant by a retail price index? [3]

(b) Explain how a retail price index is calculated. [7]

5 Demand for UK exports dropped considerably in November 2002, which pushed the UK further
into a visible trade deficit – the largest since records began.

(a) Explain what is meant by a visible trade deficit and identify in which part of the balance of
payments the deficit would be recorded. [3]

(b) Discuss whether it matters if a country has a visible trade deficit. [7]

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Copyright Acknowledgements:

Question 1 © Department for International Development

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infringed.

University of Cambridge International Examinations is part of the University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department
of the University of Cambridge.

© UCLES 2004 0455/02/M/J/04